Advice From 5 Great Stock Market Investors

Words of Wisdom From 5 Stock Market Greats

Warren Buffett Speaking with Hands
••• Paul Morigi

Some investors just stand out above the rest.  They outperform the overall broader markets, and they consistently beat out their peers.

Here are some of the best thoughts, or words of wisdom, from five of the greatest investors of all time.  Their philosophies have stood the test of many decades, and now their approach may be able to help you with your own trades as well.

1.  Benjamin Graham

How great do you have to be to teach and mentor Warren Buffett?  Well, that's exactly what Graham did, passing the philosophies from his book, "The Intelligent Investor" onto Buffett, who would then become the world's most famous value investor.  

Graham, known as the father of value investing, had significant successes on the markets.  His gains were based on companies with financial strength and strong upside, but did not carry any major risks.

One of Graham's favorite thoughts in relation to his investment approach was, "If it's close, we don't play."

2. Warren Buffett

Speaking of which, Buffett must have been paying attention to the teachings of Graham.  He followed the philosophy of his mentor, then took the process one step further - Warren improves the underlying investments through operational and management adjustments.

Some of the most popular holdings among Buffett's portfolio include IBM, Wells Fargo, Viacom, and hundreds more...

One of the best pieces of advice from Warren Buffett is, "Be fearful when others are greedy.  Be greedy when others are fearful."

3. Bill Gross

Once the founder and manager for the world's largest bond fund, PIMCO, Gross made his name managing over $600 billion in assets.  

The Bill Gross strategy typically focuses about 3 - 5 years into the future, which helps investors avoid the volatility and emotional trades that come from day to day market swings.

A great comment by Gross, which helps put everything into perspective: "When you have kidney stones, you don't give much of a damn about the view."

4. Peter Lynch

Lynch led the Fidelity Magellan Fund for over 13 years, and helped its assets under management grow from $20 million to more than $14 billion.  Lynch had an annual average return of 29%.

One of the best philosophies from Peter Lynch:  "Before you make  purchase, you should be able to explain why you are buying."  Sadly, too many investors will buy shares of a company, and not really fully understand the underlying stock.

5. George Soros

In September, 1992, George risked $10 billion on a single trade which shorted (bet against) the British Pound.  He walked away with a nearly $2 billion profit.  

Besides that one massive stomach-turning trade, Soros led the Quantum Fund, generating average annual gains of over 30%.  This far outperformed almost every investor over that same span.

Some words of wisdom from Soros: "Good investing is boring."  Truly, his investment style was about buying great investments, then having patience as they built out their operations.

While every investor is falabal, some have shown a superior strategy (and superior results) over the months, years, and decades.  When the profits are significant, and the returns are consistent, certain stock market leaders rise above the crowd, and extra attention should be paid to their words of wisdom.

For some, investing is a gut feeling, while for others it is a time-tested strategy which has been refined over many years.  The common themes between all of the greats is that you should consider investing to be about the underlying companies, not just the stocks.  As well, learn what works, go with what works, and stick with what works.